Inflation this year may exceed the 6-year high - NBU

Inflation this year may exceed the 6-year high - NBU

Inflation in Ukraine by the end of 2022 could exceed 20% due to the consequences of a full-scale war, but will be controlled, the National Bank of Ukraine said in a statement on Thursday.

 

According to the report, the rise in prices of goods and services will be caused, in particular, by the disruption of production processes, logistical problems due to the temporary occupation of parts of the territories, the destruction of transport infrastructure and, consequently, the uneven distribution of supply in certain regions.

 

In addition, the growth of inflation will be affected by the effects of the transfer of devaluation of the hryvnia exchange rate, which occurred on the eve of the war and the high cost of energy in the world, which will put pressure on the cost of fuel, goods and services with a significant share of energy in the cost of production.

 

At the same time, price growth will be restrained by measures of the National Bank and the Ukrainian government, including temporary fixing of the hryvnia exchange rate, restraining probable worsening of expectations and rise in prices of imported goods, reduction of taxes, including indirect taxation of imports, fixing prices of housing and utilities services and administrative regulation of prices of a number of food and fuel products.

 

An additional restraining effect will have an excessive supply of certain crops due to limited opportunities for their export.

 

It is indicated that after resumption of functioning of monetary transmission channels, the National Bank will again apply the discount rate and other monetary instruments to keep inflation expectations under control and gradually reduce inflation.





Inflation in Ukraine by the end of 2022 could exceed 20% due to the consequences of a full-scale war, but will be controlled, the National Bank of Ukraine said in a statement on Thursday.

 

According to the report, the rise in prices of goods and services will be caused, in particular, by the disruption of production processes, logistical problems due to the temporary occupation of parts of the territories, the destruction of transport infrastructure and, consequently, the uneven distribution of supply in certain regions.

 

In addition, the growth of inflation will be affected by the effects of the transfer of devaluation of the hryvnia exchange rate, which occurred on the eve of the war and the high cost of energy in the world, which will put pressure on the cost of fuel, goods and services with a significant share of energy in the cost of production.

 

At the same time, price growth will be restrained by measures of the National Bank and the Ukrainian government, including temporary fixing of the hryvnia exchange rate, restraining probable worsening of expectations and rise in prices of imported goods, reduction of taxes, including indirect taxation of imports, fixing prices of housing and utilities services and administrative regulation of prices of a number of food and fuel products.

 

An additional restraining effect will have an excessive supply of certain crops due to limited opportunities for their export.

 

It is indicated that after resumption of functioning of monetary transmission channels, the National Bank will again apply the discount rate and other monetary instruments to keep inflation expectations under control and gradually reduce inflation.